Weak data, see you later!
16 July, 2013
Monday’s trading provided few headlines with the exception of the US Retail sale figures for June. Analysts were expecting to see a steady growth of 0.8% from the previous month and 0.4% from the same time last year. Actual figures however fell somewhat short of this expectation with growth completely flat from last year and only up by half of the monthly forecast at just 0.4%. These figures combined with recent weaker trade and manufacturing data, point towards a softening in the US recovery and will likely add to expectations that the Federal Reserve will continue to hesitate in their plan to ease economic stimulus.
Weak data of this nature would normally lend a healthy increase in GBP/USD rates but only a half cent recovery was seen in the afternoons trading, as investors remain hesitant over the raft of data out for the UK this morning, and the potential effects on the pound over the coming weeks. After a quiet day for the UK and Eurozone, they both come into focus today with key inflation data for both currencies.
9:30am – UK Consumer Price & Core Consumer Price Index
9:30am – UK Producer Price Index Input/Output
9:30am – UK DCGL House Price Index
9:30am – UK Retail Price Index
10:00am – Eurozone Consumer Price Index
1:30pm – US Consumer Price Index
High inflation remains a concern, in particular for the UK and Eurozone. Last month GBP/EUR rates dropped around 1 cent on the day of inflation figures as we continue to see levels in excess of the Bank of England’s 2% target. Anyone who has not already secured their Euro purchase will want to keep close contact with your broker as the next 24 hours are set to be pivotal for the coming days and weeks. Most analysts fear the worst for exchange rates as we near the first minutes from the Bank of England with Mark Carney as governor. Tomorrow morning at 9:30am we will discover how Mr Carney voted on the policy of extending Quantitative Easing in the UK, something that could be detrimental for pound if he is found, as many expect, to be supporting this decision.
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